All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Global Tax 50 2014: ICIJ

Investigative journalists


ICIJ is a new entry this year

The International Consortium of Investigative Journalists (ICIJ) grabbed the attention of the tax world in October, when it publicly released 28,000 sensitive documents revealing information about tax rulings agreed between multinational companies and the Luxembourg tax authorities, many negotiated by PwC Luxembourg. The episode has become known as 'LuxLeaks'. It followed up with a second batch of documents in December, this time containing details of the involvement of the other Big 4 firms in questionable tax planning. Published in full by several major European newspapers and covered extensively in the international press, the leaked documents have shone a spotlight on comfort letter rulings in Luxembourg, exposed tax avoidance by 340 global corporations and threatened to destabilise European Commission (EC) President Jean-Claude Juncker.

Juncker was prime minister of Luxembourg from 1995 to 2013, as well as holding the position of finance minister for 20 years, and the exposé has prompted calls from many in the EU for his resignation just months into his term as President.

"We started working on this issue in 2012, and in 2013 looked at offshore leaks, based on information we had for 10 companies," says Gerard Ryle, director of the ICIJ. "In January 2014 we published another series of stories about China and Hong Kong. We've also done stories on the Seychelles, the British Virgin Islands, on Jersey where we worked with The Guardian, and more."

"This is an ongoing series of stories. In 'LuxLeaks' it was looking at the role of the Big 4 in tax avoidance."

PwC says it rejects "any suggestion that there is anything improper about the firm's work" and says that any assistance given to clients regarding negotiations with Luxembourg authorities is done in accordance with all applicable tax laws and is guided by the firm's Global Tax Code of Conduct.

So just how is a small, non-profit outfit able to expose one of the founding members of the EU as being involved in questionable deals with multinational companies, inflating its wealth to make its citizens the second-richest in the world?

Led by Ryle from its headquarters in Washington, DC, the ICIJ operates teams ranging from as few as three reporters to as many as 100 to sift through documents and produce media reports.

"Pretty much every time we do a project we work with about half members and half non-members," says Ryle.

"If we think it is of public interest and a good story, we then approach media partners such as The Guardian in the UK, Le Monde in France and Suddeutsche Zeitung in Germany."

"We don't match rival organisations, for example The Guardian and The Telegraph, so that we have a group of reporters who don't feel like they are competing and in this way we can have a true collaboration."

"With technology these days we can allow journalists to search all 28,000 documents from their laptops, which previously would have been a huge task."

The LuxLeaks story – named 'Secrecy for Sale' by the ICIJ – is unusual for the ICIJ in that the documents had already been used in stories as far back as 2012. This followed a Germany documentary, which was then picked up by the BBC's flagship investigative programme Panorama.

"The reporter from the BBC is a member [of ours] and alerted us to the fact that the documents were publicly available. They were a set of documents I wanted, so I got them!" says Ryle.

"Usually you want brand new documents and it would usually be difficult to get media organisations interested. But media partners have seen the public interest and put a lot of their time and resources into going through these documents."

"Fundamentally people really care because if some people aren't paying their fair share of tax, it means that everybody else is effectively paying more."

"We have more to come," adds Ryle. "We will still be reporting on this into 2015. But we have other stories – we are not just a tax organisation and we are not just a leaks organisation."

Ryle first became interested in reporting on tax matters when working on a tax fraud case in his native Australia. He came to realise, he says, that all major frauds, money laundering and illegal arms deals go through tax havens, as the level of secrecy they maintain makes them ideal for this purpose.

"I think what needs to happen is reform of the whole tax system across the world," he says. "If big economies wanted to change the system, they could – overnight. But it is money flowing out of poor countries into rich countries so ultimately they lose a little in tax revenues, but gain a lot in the long run."

"The only thing we can do as journalists is to expose secrecy, because secrecy is how it all works."

The Global Tax 50 2014

View the full list and introduction

Gold tier (ranked in order of influence)

1. Jean-Claude Juncker  2. Pascal Saint-Amans  3. Donato Raponi  4. ICIJ  5. Jacob Lew  6. George Osborne  7. Jun Wang  8. Inverting pharmaceuticals  9. Rished Bade  10. Will Morris

Silver tier (in alphabetic order)

Joaquín AlmuniaAppleJustice Patrick BoyleCTPAJoe HockeyIMFArun JaitleyMarius KohlTizhong LiaoKosie LouwPierre MoscoviciMichael NoonanWolfgang SchäubleAlgirdas ŠemetaRobert Stack

Bronze tier (in alphabetic order)

Shinzo AbeAlberto ArenasPiet BattiauMonica BhatiaBitcoinBonoWarren BuffettECJ TranslatorsEurodadHungarian protestorsIndian Special Investigation Team (SIT)Chris JordanArmando Lara YaffarMcKessonPatrick OdierOECD printing facilitiesPier Carlo PadoanMariano RajoyNajib RazakAlex SalmondSkandiaTax Justice NetworkEdward TroupMargrethe VestagerHeinz Zourek

more across site & bottom lb ros

More from across our site

The companies have criticised proposals for the gig economy, while the UK and EU VAT gaps have fallen in percentage terms, and ITR speaks to a European Commission adviser about its VAT reforms.
Corporations risk creating administrative obstacles if the pillar two rule is implemented too soon, sources say.
Important dates for the Women in Business Law Awards 2023
The Italian government published plans to levy capital gains tax on cryptocurrency transactions, while Brazil and the UK signed a new tax treaty.
Multinational companies fear the scrutiny of aggressive tax audits may be overstepping the mark on transfer pricing methodology.
Standardisation and outsourcing are two possible solutions amid increasing regulations and scrutiny on transfer pricing, say sources.
Inaugural awards announces winners
The UN’s decision to seek a leadership role in global tax policy could be a crucial turning point but won’t be the end of the OECD, say tax experts.
The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.